Banking News

The prospect of record low savings rates continuing is forcing many savers to review how they allocate their capital in an attempt to achieve the level of returns they have previously enjoyed. Investing in the stock market inevitably involves putting your capital at risk however there is a middle ground which continues to attract increasing interest – the structured deposit. With this in mind, we take a deeper look at this savings alternative to help understand why more and more savers are starting to see their appeal. more

With the current economic environment asking savers far more questions than it gives answers, it is good to know that there are alternatives available. We take a look at one such alternative that is proving particularly popular as savers face the harsh reality that the more traditional fixed rate savings products are failing to meet their needs. more

Millions of savers are facing the harsh realisty that there is little hope of change to interest and savings rates in the coming years. However, those with Cash ISAs do have one further option to consider – the ISA transfer. We take a closer look at why this is becoming a rising trend as well as what this could mean for those looking for the potential to improve the returns from their capital. more

With so many savers joining income investors in the hunt for high yields, being able to quickly understand and compare the numerous options available has become even more important. We therefore compare two of our most popular income investments to help understand what is driving their popularity and why they might meet your income needs. more

Stock market volatility puts pressure on Mervyn King to cut rates

24 January 2008 / by Rachael Stiles

The stock market's tumble yesterday, as a result of the US Federal Reserve cutting rates by the largest margin since 1984, is putting pressure on Bank of England governor Mervyn King to cut rates in the UK too.

The FTSE 100 Index lost 130.8 points yesterday, falling to 5609.3, as a result of the US Fed cutting the interest base rate by three-quarters of a point on Tuesday, pushing experts to urge central bankers to focus on avoiding an American recession with proactive measures rather than concentrating on the risks posed by inflation.

Inflation is reportedly one of the primary reasons holding Mervyn King back from making a cut, because the short-run inflation outlook has "worsened markedly", according to the minutes from the Monetary Policy Committee's January meeting. There is concern within the Bank of England over cutting rates at a time when there is significant risk from inflation.

This lassez faire attitude for which Mr King is known has brought criticism on the Bank for its slow reaction to the emerging credit crunch which started with the Northern Rock fiasco, a casualty of the collapse of the America sub prime mortgage market, the effects of which have rippled throughout the global economy.

The MPC voted to maintain the base rate at 5.5 per cent in January but there are hopes that it will be cut in February. The rate cut in America failed to dispel fears of a recession as both US and European share prices suffered yesterday, and there is concern that the cut is indicative that a recession is not only a threat but is already underway.

Wall Street is now bracing itself for what some financial experts are warning might be a 20 per cent drop in deals activity in 2008, compared to last year's record breaking volume of $1,617 billion.